Lukoil to invest more than $100mn in Sierra Leone exploration

The cost of Lukoil's minimum exploration programme at the SL-5-11 block in Sierra Leone will be about $100mn, the corporate newspaper of Lukoil Overseas, the operator of the Russian oil major's international upstream projects, reportedA standard comprehensive contract has been signed for exploration and production at the block. The duration of the contract is 30 years. Over the next two years, Lukoil intends to reinterpret previously obtained seismics, conduct electrical surveys, and drill one exploration well at the block. The scale of investment in the next phase of exploration will depend on the drilling results.


The contract also provides for social responsibilities, including a $10mn contribution to Sierra Leone government social programmes. This money was paid when the deal was closed, the paper said.


Key contractors

Lukoil is currently opening an office in Freetown, drawing up a schedule and budget for next year and recruiting key contractors, including for offshore drilling work. The company might also open a field office on the coast.

Lukoil Overseas in July reached an agreement to acquire from Oranto Petroleum a 49 per cent stake in the exploration and production agreement for the deepwater SL-5-11 block off the coast of Sierra Leone.

The 4,022-square-km SL-5-11 block is located in Sierra Leone waters, on the shelf and continental rise of the Atlantic Ocean, 35 km from the port of Bonte and 170 km from Freetown, the country's capital. Water depth within the block ranges from 100 to 3,500 meters. 2D and 3D seismic survey conducted at the block have identified several prospective structures, including Savanna and Leon. The block is part of the Sierra-Leone - Liberia Basin, where a number of sizable oil fields have been discovered over the past two years, confirming the prospectivity of the basin. One of these fields, Venus, discovered by U.S. firm Anadarko, is located right next to the Leon structure and "is essentially a part of it," the paper said.

Lukoil Overseas, the operator of the project, has a 49 per cent stake, Nigeria's Oranto holds 30 per cent and Vanco of the United States owns 21 per cent.

Lukoil is already working in West Africa, on projects in Ghana and Ivory Coast.


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